Meet one of our leading experts in Exotic Currencies

In the first ‘staff spotlight’ blog, we speak to Zafeer Ahmed, on of Ebury’s specialists in exotic currencies.

Q: What separates Ebury from the competition when it comes to exotic currency services?

A: We are able to access highly illiquid exotic currencies that many other financial institutions do not have access to. We have extended this offering to liquidity for hedging, and this is really where we distinguish ourselves. Not only are we able to access forward liquidity in currencies where traditionally this can be very difficult to find, but we are also able to do this at a highly competitive rates.

Significantly, our ability to offer deliverable forwards in: INR, NGN, PGK, PHP, TZS, XAF, XOF, makes us one of very few providers worldwide who can do this, which results in Ebury having little to no competition in these fields.

Q: Which exotic currency is requested most frequently?

A: The Indian rupee is requested most frequently, due to India being the largest of all the emerging markets (excluding China, which is not really an emerging market anymore). INR is requested by both charities and corporates.

Q: How is Ebury able to trade so successfully with exotic currencies?

A: Due to the volume of currency we trade as well as our relationships with market makers and local banks in these regions. We are also able to settle exotic currency trades in a much shorter time frame than many providers due to our first class banking relationships and network of intermediary banks.

A crucial part of working in these regions is having an operations team who are experienced and educated in instructing payments to exotic locations, where banking systems may not be as developed. We are able to identify where potential pitfalls may be. We also have a well-run treasury team who understand the risks and volatilities of exotic currencies. This allows us to closely manage our risk, and thus offer clients very competitive credit terms on forwards in exotic currencies, whilst simultaneously following our traditionally risk averse business approach.

Q: What do the hedging solutions consist of with regard to exotic currencies?

A: Ebury have vast experience in providing tailored hedging solutions for clients exposed to emerging market currencies. These hedging strategies consist of a combination of Spot, Forward and NDF products which are uncommonly offered by clearing or custodian banks in these currencies.

Our knowledge of these emerging market currencies is supplemented by our team of analysts based in New York. Through this team, we are able to access market insight, provide Bloomberg forecasting in a range of currencies (where we have recently been ranked no.1 and no.3 in EUR/ZAR and USD/ZAR respectively). Not only is this a tool for our dealing team, but for our clients too, allowing them to manage their currency exposures accordingly.

Q: Who can benefit from this expertise?

A: We work with a number of NGO’s, Micro-finance Institutions, Private Equity companies and businesses investing or supporting projects in Emerging Markets.

Q: Which exotic currency would you predict as next to rise significantly in value and why?

A: INR – The rupee has gained strength against the US dollar this year on the back of a recovering economy. In spite of this year’s General Election, we have actually seen large inflows into the Indian economy. The main reason for this, in my eyes, is the expectation for the election to end in victory for Narendra Modi. Modi and his potential government is seen as being business-positive, as he has shown during his tenure as Chief Minister of the state of Gujarat.

Foreign investors have pumped money into equities and other asset classes, with the Sensex reaching lifetime highs this month. In fact, the RBI has recently been seen buying dollars intermittently to slow the rupee’s appreciation (also in a move to replenish its foreign exchange reserves which were depleted during the rupee’s sharp depreciation last year). This specific INR move has been supported by a more general emerging market strengthening we have seen recently down to speculation of monetary stimulus in China.

My expectation would be for the rupee to continue strengthening as the collateral damage of QE tapering eases, as well as the expected victory of Narendra Modi attracting significant foreign direct investment into the Indian economy.

Ebury has access to over 140 currencies and if you would like to speak to Zafeer about our exotic currency services please do get in touch on on 0845 519 1009 or email us at info@ebury.com